Between the June USDA World Agricultural Demand and Supply Estimates (WASDE) report and early August, U.S. corn production estimates declined from 14.8 billion bushels to about 11.5 billion bushels. The August WASDE will be released on August 10. Between June 12 and August 2, U.S. wheat production estimates have changed very little.

Ending stocks estimates for U.S. corn have declined from 1.88 billion bushels in the June WASDE to 1.18 billion bushels in the July WASDE. Current ending stocks estimates are around 800 million bushels. United States wheat ending stocks estimates have declined from 694 million bushels to 664 million bushels.

World corn ending stocks estimates mostly reflect changes in U.S. corn production and ending stocks expectations. World wheat ending stocks estimates have declined from 6.83 billion bushels to 6.70 billion bushel and reflect lower production expectations for Russia, Europe, and Australia.

World and U.S. corn stocks are tight, and corn prices must stay relatively high to ration corn supplies. Wheat stocks are slightly below average in the U.S. and slightly above average in the world. The market just has to keep milling quality wheat out of the feed (corn) market.

The result of tighter corn stocks was the Chicago Board of Trade December corn contract price increasing from $5.06 after the June WASDE was released to a peak of $8.20 on July 31. At this writing, The CBT December corn contract price is $7.94, a $3.14 price increase and a $0.26 price decline.

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Tighter corn stocks and relatively little change in wheat stocks resulted in the Kansas City Board of Trade December wheat contract prices increasing from $6.67 after the June WASDE report to a peak price of $9.57 on July 19. At this writing, the KCBT Dec contract price is $8.95, a $2.90 price increase and a $0.63 price decline.

Corn prices increased more than wheat prices, and wheat prices have declined more than corn prices. Corn prices led wheat prices higher and wheat prices have led corn prices lower.